At present, F-35 Lightning II/ Joint Strike Fighter production is led by Lockheed Martin, with BAE and Northrop-Grumman playing major supporting roles, and many subcontractors below them. F-35 main production and final assembly is currently slated to take place in Lockheed Martin’s Fort Worth, TX plant, though Italy and Britain may end up getting Final Assembly and Check-Out (FACO) plants of their own.
In order to cut F-35 production cycle time, and hence production costs, the team currently produces major sections of the aircraft at different feeder plants, and “mates” the assemblies at Fort Worth. This is normal in the auto industry, but it’s a departure from the usual fighter-building process which has raw materials and individual parts or small sub-assemblies feed into production lines, then rolls finished fighters out the other end. The precise tolerances required for a stealthy fighter, however, are much more exacting than even high-end autos. To cope, Manufacturing Business Technology reports that the team has turned to an integrated array of back-end IT systems in order to manage this new process, from CATIA CAD, to Visiprise MES, TeamCenter PLM, SAP ERP, and even a locally-designed Production & Inventory Optimization System (PIOS) for manufacturing resources planning and supply chain management.
This ‘digital thread’ has been very successful for the team, with part fits showing incredible precision, and successful coordination of plants around the end schedule for key events like the Dec 18/07 F-35B rollout. The system’s ultimate goal is to cut a plane’s production cycle time from the usual 27-30 months to about a year, and lead time from order creation to printed, matched manufacturing orders from 15-20 days to 6-8 days. Read MBT’s “Fly high on a thread” to learn more.
In “Retired RAAF Vice-Marshal: Abandon F-35, Buy F-22s,” DID covered the controversy over the F-35A Lightning II’s suitability for Australia’s strategic needs, amidst a flurry of criticism from opposition party critics, the media, and even retired military officials. Australia’s Liberal Party government under Prime Minister John Howard went ahead and signed the F-35 Production MoU in November 2006, which doesn’t commit them to buy the aircraft just yet. Then it went ahead and submitted a USD $3.1+ billion order without a competition process for 24 Super Hornets, in order to address Australia’s air capability gap until the F-35As arrive.
In November 2007, Australia elected the Labor Party to government, though the Liberal Party still holds a balance of power in the Senate. Now, the rumblings of opposition have turned into a formal review – and everything appears to be up for grabs, including the F/A-18F contract, Australia’s F-35 buy, and a potential request for an export version of the F-22 Raptor. The review will be conducted in two stages…
India is planning a $1.5 billion upgrade for its 30 military airports and their air traffic control systems, and reportedly issued a request for bids in January. According to India Defence, invited bidders to Phase 1 included: France’s Thales, the U.S.’s Lockheed Martin, Germany’s Siemens, Italy’s Selex, Britain’s Terma. Indian firms Tata Power and Mumbai-based NELCO were also invited.
Phase 1 will include the supply, installation, testing and integration of equipment subsystems at airfields that include Adampur, AFA, Agra, Ambala, Bagdogra, Bareilly, Bhatinda, Bhuj, Bidar, Chabua, Chandigarh, Gorakhpur, Gwalior, Halwara, Hasimara, Hindon, Jaisalmer, Jamnagar, Jodhpur, Jorhat, KKD, Nal, Naliya, Pathankot, Pune, Sirsa, Suratgarh, Tezpur, Uttarlai and Yelahanka. India Defence’s “US$ 1.5 Billion Upgrades For 30 Indian Air Force Military Bases” has further details re: the required components and other specifications.
On Feb 7/08, the USA’s Congressional “Government Accountability Office” auditors released report #GAO-08-298, “DOD’s Practices and Processes for Multiyear Procurement Should Be Improved.” Multi-year procurements are used for a number of key projects, including the F-22A Raptor fighter, H-60 helicopters, and more. Official reports have cited it as a helpful factor in a number of past programs, which has kept costs down by facilitating bulk buys, plant investments, timely hiring and training, greater employment stability and hence better learning curves, et. al.
“Although the law has clear requirements for stable, low risk programs with realistic cost and savings estimates, lack of guidance and a rigorous process is not achieving this. It is difficult to precisely determine the impact of multiyear contracting on procurement costs. GAO studies of three recent MYPs identified unit cost growth ranging from 10 to 30 percent compared to original estimates, due to changes in labor and material costs, requirements and funding, and other factors. In some cases, actual MYP costs were higher than estimates for annual contracts. Although annual contracts also have unit cost growth, it is arguably more problematic for MYP’s because of the up-front investments and the government’s exposure to risk over multiple years. MYP savings were on average higher before changes in law called for “substantial savings” rather than a specific quantitative standard. Other factors–lower quantities of modern systems procured, stricter cancellation liability allowances, and contraction in the defense industrial base–may have also impacted savings by lessening opportunities for more efficient purchases, a key attribute of MYPs. DOD does not track multiyear results against original expectations and makes little effort to validate if actual savings were achieved. GAO’s case studies indicate that evaluating actual MYP results provides valuable information on the veracity of original estimates in the justification packages, the impacts on costs and risks from internal and external events, and lessons learned that can be used to improve future multiyear candidates and savings opportunities.”
“The first FFG-7, including its combat systems, cost a total of about $650 million (in 2008 dollars) to build, or about $235 million per thousand tons. Applying that per-ton estimate to the LCS program suggests that the lead ships would cost about $575 million apiece, including the cost of one mission module (to make them comparable to the FFG-7)… Navy has not publicly released an estimate for the LCS program that incorporates the most recent cost growth… CBO estimates that with that growth included, the first two LCSs would cost about $630 million each, excluding mission modules but including outfitting, postdelivery, and various nonrecurring costs… Excluding mission modules, the 55 LCSs in the Navy’s plan would cost an average of $450 million each, CBO estimates.”
“Cost Growth Leads to Stop-Work on Team Lockheed LCS-3 Construction (updated)” and “US Navy Sinks LCS-4 Construction” chronicled the crash of the original program’s acquisition plan, and cancellation of both Flight 0 ships. Both contractor teams refused to commit to a new contract model that would let the Navy continue to force as many design changes as they liked, while holding contractor fees fixed and leaving the contractor financially responsible for cost overruns. Now Defense News reports that Navy FY 2009 budget documents released on Feb 4/08 give cost figures for the first 2 LCS ships: Team Lockheed’s LCS 1 Freedom, and the Austal/GD team’s trimaran LCS 2 Independence. Care to guess?
Savi Technology, Inc. of Mountain View, CA, which became a Lockheed Martin subsidiary in an May 2006 acquisition, recently received time and ceiling extension to its US military RFID contract. The firm has provided RFID solutions to the DoD for more than a decade, and helped build the DoD’s RF In-Transit Visibility (ITV) network, which spans more than 45 countries and tracks military supplies through 4,000 sites. The current RFID II contract was initially awarded in January 2003, and this is the 2nd contract extension and 3rd ceiling increase that Savi has received. This latest modification extend its period to Jan 31/09, and its ceiling is increased by about $60 million to $483 million.
Think of RFID as wireless bar codes that don’t need to be swiped individually. Savi’s products include active RFID asset tags, data rich high performance tags, sensor tags that monitor security and environmental conditions, related fixed and mobile readers, as well as fully integrated site and enterprise software products that enable customers to track shipments worldwide. The US military has invested heavily in RFID for its supply chain; recent years have begun to feature positive results, as well as the creation of an RFID solutions center near Wright-Patterson AFB, OH.
These contract amendments were made by the U.S. Army’s Information Technology, E-Commerce and Commercial Contracting Center (ITEC4), and the executive agent for the DoD is the office of the Product Manager, Joint-Automatic Identification Technology. In addition to the US DoD, this Lockheed Martin group provides RFID solutions for NATO, and defense forces in the United Kingdom, Australia, Denmark, Sweden, Spain, et. al. One of its current foci building interoperable RFID-based networks for allies, enabling them to improve the management of consignments for multi-national, joint-force operations – something USJFCOM has also been working hard to achieve. See Lockheed Martin release.
Lockheed Martin Government Services, Inc. in Seabrook, MD received a 7th year option of $27.1 million as part of contract MDA220-01-D-0002 for management of the Retired and Annuitant pay service. The service was formerly managed by the Defense Finance and Accounting Service (DFAS), but was the subject of an “A-76 action.” The core concept of the American “A-76” option is that it puts in-house services up for bid against private contractors, and may outsource the function if outside contractors can deliver better and cheaper. This sort of thing can be rather disconcerting to our readers in government departments, while many our readers working in large corporations probably wish they had this option with some of their internal departments. DID covered option #6 last year, along with a very provocative and interesting follow-on question from a reader re: A-76 competitions.
The estimated aggregate face value of this contract at time of award was $346.4 million. Primary work is performed at DFAS Cleveland, OH and secondary work which includes document scanning and primarily imaging is performed at London, KY. Under this option, work will be performed between Feb 1/08, through Jan 31/09. The DFAS Contract Services Directorate in Columbus, OH issued the contract (MDA220-01-D-0002).
FORTUNE Magazine has released its annual list of America’s Most Admired Companies, and a number of defense-related firms find themselves noted in the data. To quote FORTUNE re: their methodology:
“The Most Admired list is the definitive report card on corporate reputations. Our survey partners at Hay Group started with the FORTUNE 1,000 – the 1,000 largest U.S. companies ranked by revenue – and the top foreign ones operating in the U.S. Hay sorted them by industry and selected the ten largest in each. To create the 63 industry lists, Hay asked executives, directors, and analysts to rate companies in their own industry on eight criteria, from investment value to social responsibility. Only the best are listed as most admired: A company’s score must rank in the top half of its industry survey. Ranks for the rest of the contenders are available online only.”
The criteria evidently managed to completely exclude key global defense & aerospace players with notable US businesses/revenues, including BAE Systems and EADS (which includes Airbus & Eurocopter). This is a major pair of omissions, to say the least. Methodology flaws aside, firms that made the cut in their sectors and do a lot of work in our industry – or were on the receiving end of cutting ratings – included:
On Dec 25th, UK servicemen and women posted overseas in countries such as Iraq, Afghanistan, the Balkans and the Falkland Islands receive a Christmas box filled with gifts. Inspired by a tradition that dates back to the First World War, the Christmas box program was established 3 years ago by charity UK4U; this year, they distributed gifts to more than 25,000 British troops. The final send off for the items took place on Dec 22/07 this year, and the UK MoD has a feature describing their receipt.
What a fine idea. This worthy program is made possible by industry sponsors, including:
Angliss BAE Systems
Cooneen Watts & Stone
Fleet Air Arm Association
Fretwell Downing Hospitality
Gifts by Design
J C Bamford Excavators
Lockheed Martin Corporation
Marks and Spencer
NP Aerospace (England)
Nuffield Trust for Forces of the Crown
PA Consulting Group
Purple Food Service Solutions
Royal Photographic Society
Sodexho Defence Service
Twinings of London
Yellow Ribbon Foundation
In December 2003, Japan decided to upgrade their 4 existing Kongo Class AEGIS Destroyers and their SPY-1D radars to full AEGIS Ballistic Missile Defense capability. Installations are scheduled for 2007 through 2010, and each installation will be followed by a flight test to demonstrate proper operation. They will fire the naval SM-3 Standard missile, which is under co-development as part of cooperation with the USA on missile defense. These ships will form the outer layer of Japan’s anti ballistic missile shield, with the land-based Patriot PAC-3 forming the point defense component.
It would appear that the first-of-class ship JS Kongo [DDG-173] is also the first Japanese ship to have the BMD upgrade installed. Cue the flight test, as JS Kongo becomes the first Japanese ship to destroy a ballistic missile. On Dec 17/07 at 12:05 pm Hawaii time, a medium-range ballistic missile target was fired from the U.S. Navy’s Pacific Missile Range Facility on Kauai, Hawaii. JS Kongo responded by tracking it and launching an SM-3 Block 1A missile at 12:08 pm. At 12:11pm, it destroyed the missile about 100 miles above the ocean, achieving a first for Japan and the 12th successful intercept overall for the SM-3 ABM program. The American cruiser and ABM test veteran Lake Erie [CG 70] monitored the test, tracking the incoming missile with its own AEGIS BMD and exchanging information with a land-based THAAD ABM unit on Kauai.